Shopping on line can be easy, simple and save you lots of money. It can also take a lot of your time, frustrate you, and result in unwanted purchases. Now the same can be said for regular high street shopping, but with the vast opportunity presented by the Internet it will pay you to spend a few minutes reading this and understanding how to better optimize your Speculation shopping experience:
1. Compare - without doubt the biggest advantage that the Speculation offers shoppers today is the ability to compare thousands of Speculation at a time. This is a great thing, but not necessarily all the time! Too much can be daunting at times so take advantage of the great comparison sites and where possible let them do the hard work for you.
2. Research - if it has been said it will be on the internet. Ignorance is no longer a justifiable reason for buying the wrong thing. Take the time to research in detail everything that you could possible want to know about
3. Testimonials - don't know anybody that has bought a Speculation? Wrong! If the Speculation is good the internet will let you know. Use the Internet as a friend and get testimonials before you buy.
4. Questions - Got a question about Speculation then search the Forums, FAQ's, Blogs etc. Don't be afraid to ask .....
5. Reputation - Never heard of the company selling Speculation? Don't worry, no reason why you should know every company in the world, but you know someone that does! Use the internet to find out what people are saying about Speculation and build up a picture of their reputation for sales, returns, customer service, delivery etc.
6. Returns - still worried that even after all of the above your Speculation wont be what you want? Check out the returns policy. There is so much competition now that someone, somewhere is bound to offer the terms that you are comfortable with.
7. Feedback - happy with your Speculation then let people know, after all you are depending on others people input in your buying decision, so why not give a little back.
8. Security - check for the yellow padlock on the Speculation site before you buy, and the s after http:/ /i.e. https:// = a secure site
9. Contact - got a question about Speculation, or want to leave a comment then check out the sites contact page. Reputable companies have them and respond.
10. Payment - ready to pay for your Speculation, then use your credit card or PayPal! Be aware of companies that don't accept them, there may be genuine reasons but given the huge amount of choice you have when buying online there is no reason at all not to buy via credit card or PayPal.
Speculation, in the narrow sense of financial speculation, involves the trade of
stocks,
bond (finance),
commodity,
currency, collectibles, real estate,
derivative (finance), or any valuable financial instrument to profit from fluctuations in its price as opposed to buying it for use or for income via methods such as dividends or interest. Speculation or
agiotage represents one of three market roles in Western financial markets, distinct from hedging, long- or short-term
investing, and
arbitrage.
Speculation areas
Convention, and especially satire, sometimes portray speculators comically as speculating in
pork bellies (in which a real market and real speculators exist) and often "losing their shirts" or making a fortune on small market changes. Speculation exists in many such commodities, but, if measured by value, the most important markets deal in futures contracts and other
Derivative (finance) involving Leverage (finance) that can transform a small market movement into a huge gain or loss.
Type of speculators
Most non-
professional traders lose money on speculation, while those who do make money tend to become professionals. Occasionally some dramatic event will occur, such as the effort of the
Nelson Bunker Hunt to corner the
silver market or the currency speculations of
George Soros or the speculative trading of
Nick Leeson, which caused the collapse of Barings Bank.
By some definitions, most long-term investors, even those who buy and hold for decades, may be classified as speculators, excepting only the rare few who are not primarily motivated by eventually selling at a good profit. Some dedicated speculators are distinguished by shorter holding times, the use of
leverage (finance), by being willing to take
short (finance) positions as well as long (finance) positions (in markets where the distinction can be reasonably made). A degree of speculation exists in a wide range of financial decisions, from the purchase of a house to a bet on a horse; this is what modern market economists call "ubiquitous speculation."
In Security Analysis, Benjamin Graham gave a definition of speculation in relation to investment: "
An investment operation is one which, upon thorough financial analysis, promises safety of principal and a satisfactory Returns (economics). Operations not meeting these requirements are speculative."
The economic benefits of speculation
The service provided by speculators to a market is primarily that by risking their own capital (economics) in the hope of profit, they add
liquidity to the market and make it easier for others to offset risk, including those who may be classified as
hedge (finance) and arbitrage.
If a certain market - for example, pork bellies - had no speculators, then only producers (pig farmers) and consumers (butchers, etc.) would participate in that market. With fewer players in the market, there would be a larger bid/offer spread between the current bid and ask price of pork bellies. Any new entrant in the market who wants to either buy or sell pork bellies will be forced to accept an Market liquidity and market prices that have a large bid-ask spread or might even find it difficult to find a co-party to buy or sell to. A speculator (e.g. a pork dealer) may exploit the difference in the spread and, in competition with other speculators, reduce the spread, thus creating a more efficient market.
Another example of the value of speculators is the ability of a pig farmer to sell his pork on a futures exchange at a known price ahead of its production.
Some side effects
Auctions are a method of squeezing out speculators from a transaction, but they have their own perverse effects; see
winner's curse. The winner's curse is however not very significant to markets with high liquidity for both buyers and sellers, as the auction for selling the product and the auction for buying the product occur simultaneously, and the two prices are separated only by a relatively small spread. This mechanism prevents the winner's curse phenomenon from causing mispricing to any degree greater than the spread.
Speculative purchasing can also create inflationary pressure, causing particular prices to increase above their "true value" (real value - adjusted for inflation) simply because the speculative purchasing artificially increases the demand. Speculative selling can also have the opposite effect, causing prices to artificially decrease below their "true value" in a similar fashion. In various situations, price rises due to speculative purchasing cause further speculative purchasing in the hope that the price will continue to rise. This creates a positive feedback loop in which prices rise dramatically above the underlying "value" or "worth" of the items. This is known as an economic bubble. Such a period of increasing speculative purchasing is typically followed by one of speculative selling in which the price falls significantly, in extreme cases this may lead to
stock market crash. Overall, the participation of speculators in financial markets tends to be accompanied by significant increase in short-term market volatility. This is not necessarily a bad thing, as heightened level of volatility implies that the market will be able to correct perceived mispricings more rapidly and in a more drastic manner.
Etymology
The Etymology of the word is as follows; from O.Fr. speculation, from L.L. speculationem (nom. speculatio) "contemplation, observation," from L. speculatus, pp. of speculari "observe," from specere "to look at, view". Speculator in the financial sense is first recorded 1778. Speculate is a 1599 back-formation.
What is significant to note is the change from a passive to an active form of use. Specifically from a strict observer to one who contemplates what they observe then further to one who contemplates and acts on what they observe.
With these changes, the word as now commonly used, describes one who observes an object, event, or situation and takes some form of action with regard to the observed, all the while aware they may not know all the facts or factors regarding that which they observe. E.g. the financial speculator, one who understands and accepts he may not know all the facts or risks involved with a venture, yet chooses to invest his capital in the venture for the possibility of receiving greater capital in return.
Books
| last = Sobel | first = Robert
| title = The Money Manias: The Eras of Great Speculation in America, 1770-1970
| year = 2000
| origyear = 1973
| publisher = Beard Books
| isbn = 1-58798-028-2
-->
| last = Gunther | first = Max
| title = The Zurich Axioms
| publisher = Souvenir Press
| year = 1992
| isbn = 0-285-63095-4
-->
| last = Niederhoffer | first = Victor
| title = Practical Speculation
| publisher = Wiley
| year = 2005
| isbn = 0-471-67774-4
-->
See also
Speculation, in the narrow sense of financial speculation, involves the trade of
stocks, bond (finance), commodity,
currency, collectibles, real estate, derivative (finance), or any valuable financial instrument to profit from fluctuations in its price as opposed to buying it for use or for income via methods such as dividends or
interest. Speculation or
agiotage represents one of three market roles in Western
financial markets, distinct from hedging, long- or short-term
investing, and
arbitrage.
Speculation areas
Convention, and especially satire, sometimes portray speculators comically as speculating in pork bellies (in which a real market and real speculators exist) and often "losing their shirts" or making a fortune on small market changes. Speculation exists in many such commodities, but, if measured by value, the most important markets deal in
futures contracts and other Derivative (finance) involving Leverage (finance) that can transform a small market movement into a huge gain or loss.
Type of speculators
Most non-
professional traders lose money on speculation, while those who do make money tend to become professionals. Occasionally some dramatic event will occur, such as the effort of the
Nelson Bunker Hunt to corner the silver market or the currency speculations of George Soros or the speculative trading of Nick Leeson, which caused the collapse of Barings Bank.
By some definitions, most long-term investors, even those who buy and hold for decades, may be classified as speculators, excepting only the rare few who are not primarily motivated by eventually selling at a good profit. Some dedicated speculators are distinguished by shorter holding times, the use of
leverage (finance), by being willing to take short (finance) positions as well as
long (finance) positions (in markets where the distinction can be reasonably made). A degree of speculation exists in a wide range of financial decisions, from the purchase of a house to a bet on a horse; this is what modern market economists call "ubiquitous speculation."
In
Security Analysis, Benjamin Graham gave a definition of speculation in relation to investment: "
An investment operation is one which, upon thorough financial analysis, promises safety of principal and a satisfactory Returns (economics). Operations not meeting these requirements are speculative."
The economic benefits of speculation
The service provided by speculators to a market is primarily that by risking their own
capital (economics) in the hope of profit, they add
liquidity to the market and make it easier for others to offset
risk, including those who may be classified as
hedge (finance) and
arbitrage.
If a certain market - for example, pork bellies - had no speculators, then only producers (pig farmers) and consumers (butchers, etc.) would participate in that market. With fewer players in the market, there would be a larger
bid/offer spread between the current bid and ask price of pork bellies. Any new entrant in the market who wants to either buy or sell pork bellies will be forced to accept an
Market liquidity and market prices that have a large bid-ask spread or might even find it difficult to find a co-party to buy or sell to. A speculator (e.g. a pork dealer) may exploit the difference in the spread and, in competition with other speculators, reduce the spread, thus creating a more efficient market.
Another example of the value of speculators is the ability of a pig farmer to sell his pork on a
futures exchange at a known price ahead of its production.
Some side effects
Auctions are a method of squeezing out speculators from a transaction, but they have their own perverse effects; see
winner's curse. The winner's curse is however not very significant to markets with high liquidity for both buyers and sellers, as the auction for selling the product and the auction for buying the product occur simultaneously, and the two prices are separated only by a relatively small spread. This mechanism prevents the winner's curse phenomenon from causing mispricing to any degree greater than the spread.
Speculative purchasing can also create inflationary pressure, causing particular prices to increase above their "true value" (real value - adjusted for inflation) simply because the speculative purchasing artificially increases the demand. Speculative selling can also have the opposite effect, causing prices to artificially decrease below their "true value" in a similar fashion. In various situations, price rises due to speculative purchasing cause further speculative purchasing in the hope that the price will continue to rise. This creates a
positive feedback loop in which prices rise dramatically above the underlying "value" or "worth" of the items. This is known as an economic bubble. Such a period of increasing speculative purchasing is typically followed by one of speculative selling in which the price falls significantly, in extreme cases this may lead to
stock market crash. Overall, the participation of speculators in financial markets tends to be accompanied by significant increase in short-term market volatility. This is not necessarily a bad thing, as heightened level of volatility implies that the market will be able to correct perceived mispricings more rapidly and in a more drastic manner.
Etymology
The Etymology of the word is as follows; from O.Fr. speculation, from L.L. speculationem (nom. speculatio) "contemplation, observation," from L. speculatus, pp. of speculari "observe," from specere "to look at, view". Speculator in the financial sense is first recorded 1778. Speculate is a 1599 back-formation.
What is significant to note is the change from a passive to an active form of use. Specifically from a strict observer to one who contemplates what they observe then further to one who contemplates and acts on what they observe.
With these changes, the word as now commonly used, describes one who observes an object, event, or situation and takes some form of action with regard to the observed, all the while aware they may not know all the facts or factors regarding that which they observe. E.g. the financial speculator, one who understands and accepts he may not know all the facts or risks involved with a venture, yet chooses to invest his capital in the venture for the possibility of receiving greater capital in return.
Books
| last = Sobel | first = Robert
| title = The Money Manias: The Eras of Great Speculation in America, 1770-1970
| year = 2000
| origyear = 1973
| publisher = Beard Books
| isbn = 1-58798-028-2
-->
| last = Gunther | first = Max
| title = The Zurich Axioms
| publisher = Souvenir Press
| year = 1992
| isbn = 0-285-63095-4
-->
| last = Niederhoffer | first = Victor
| title = Practical Speculation
| publisher = Wiley
| year = 2005
| isbn = 0-471-67774-4
-->
See also
Speculation - Wikipedia, the free encyclopedia
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speculation - Wiktionary
The translations below need to be checked and inserted above into the appropriate translation tables, removing any numbers. Numbers do not necessarily match those in definitions.
